If you are studying finance, don’t say you want to be an investment banker. The best-paying jobs now are not in mergers-and-acquisitions (M&A) but in private-equity (PE), says an article in Hive.
Why investment banking is losing charm?
While advising top companies on buying other companies still seems like a power job, it puts you at the client’s beck and call 24x7. For all that stress, you can hope to make only a few millions a year at the top.
A job in private equity?
Private-equity is a different ball game, though. It involves buying and selling companies using other people’s money and its stars. Blackstone Group co-founder Stephen Schwarzman, Apollo Global Management co-founder Leon Black and KKR co-founder Henry Kravis, are billionaires many times over. The work is less stressful and the rewards are bigger.
The poaching process
For the past few years, PE firms have been poaching talent from investment banks, says the article. It’s a race between the big New York firms and smaller firms based in Chicago, San Francisco and Boston. The process begins with an email from one of the many PE headhunters. Since the candidates don’t have any real experience, recruiters rate them by the ‘pedigree’ of the investment bank they work for, and how articulate and presentable they are. Investment banks have been rattled, of course.
Tying down staff isn't helpful?
Why don’t banks shackle their analysts with long service bonds and penalties? That would be counterproductive. Any bank that becomes known for tying down staff will find it difficult to attract top talent. On the other hand, banks that accept and even encourage their recruits to move on see a beeline of the smartest graduates.